Tuesday, June 30, 2009

Oh, they are obscene - really obscene! If you believe this, go back and reread the first two posting. The bottom line? It does not matter how obscene they appear. Pensions (a ten dollar bill) are only a portion of the cost to the employer. What matters is total cost - PERIOD! General Motors did not become non-competitive with the Japanese because of pensions and health insurance. They became non-competitive because their "unit costs" were higher than the Japanese "unit costs." Unit costs is all costs - land. labor, capitol, and entrepreneurship. It is true that labor is a big component, but it is still just a portion of the cost.

Why is it that people speak with such sanctimony when talking about "public funds?" Why are "public funds" any more sacred than corporate and individual funds? Why are public funds elevated to a status of Deity and non-public funds seen as decadent and obscene? I am looking at today's edition of the Wall Street Journal and on the front page is Bernard Madoff. Until yesterday, he was a full partner in the "public funds." Now, he is a outcast with no say so. The purpose of this diatribe is to pronounce that all funds (money) are created equally. I choke every time I hear the phrase "public coffers." What is that? God's checking account?

Last week, I received an email from Modesto. It was the most intelligent rebuttal to my remarks that I have ever received. I was amazed at the knowledge that this person had concerning pensions and pay. It was impressive. One of the points raised was the burden of risk that the city had to shoulder concerning defined benefit pensions and how the writer felt this to be something less than prudent. I was at the San Francisco airport when I received this articulate email. I quickly shot back a reply that pointed out that risk was a two-way street that offered gains as well as losses. In no time, I received a response that readily acknowledged this, but insisted that the risk, good or bad, should not be borne by the employer. You know, I cannot disagree with any of the arguments that my writer raised.

Today, we will look at those risks. There are four major risks - market, mortality, actuarial, and political. Not sure about that last one? Well, if it was not for the political risk we would not be having this discussion. California is inundated with the "more conservative than thy" groups. This has led to the development of a popular consensus that governmental entities should not be subject to risk like all of us are in our personal lives.

Let's look at the risk and potential negative exposure. Market risk means that the invested assets may be less than what is required currently - the evil unfunded liability(think the devil, the plague, or Hitler). The mortality risk (We wouldn't have promised such a generous pension if I had known you were going to live so long.) Actuarial risk (Sorry, we thought more people would quit before becoming vested.). The political risk (We did not know that Review-Journal or the Union Tribune might suddenly attack your pension, forcing us to lower the benefits.)

The political risk is the sole property of the employee. The other three are transient. They can be shifted between the employee and the employer at anytime. Let me put some labels on this. A plan that puts the risk on the employer is a "defined benefit plan." A better name would be guaranteed benefit. The plan where the employee has the risk is a "defined contribution plan." A better name would be guaranteed contribution. The assumptions that actuaries use for defined benefit plans have been very good. It is true that any given point in time the actual results are better or worse than the assumptions, but in the long run the assumptions are fairly accurate.

You could easily assume that this risk is the thing that is causing the strong push back on public safety pensions, but that would be wrong. It is not the risk that brings out this public animus. It is the vulgar shadow of a pension deemed outrageous by empirical data that has evolved into dogma. The anger raised by the 90% pension is not based on economics or mathematics, but the oldest vice know to man - envy. They have it and I don't.

When I was growing up in the fifties and sixties, there was a shoe shine man (African descent) who always had a shiny, relative new Cadillac Coupe De ville. When we went to a football game, or the county fair, the person with the most expensive and best looking car was this shine guy. While it was never said directly, but with pointed remarks, most people felt that a person in his station in society was not deserving of having the best car in town. After all, he was the lowly shine man at the barbershop.

The thing that the people in my town never acknowledged was the sacrifice that this man had to make to be number one in the car parade. He made no more money than other shine men. He just spent his differently. I am sure he had no savings, life insurance or health insurance. I know for a fact that his home was a shack on the East side of town. He had no television and never ate out. Another thing I am certain about is that none of us "uppity white folks" ever took the time to calculate the value of the forbearance required to own that Cadillac. We just saw a shine man driving this expensive automobile. He already held a position of low esteem in our town because of his dark skin and his unskilled job. The car just added contempt to his resume.

I know what many of you are thinking. Our police officers and firefighters have the Cadillac (90% pension) and all of the other amenities of life. In the first issue of this saga I told you that the average police officer in California has a total compensation package of $125,000. Do you find a compensation package of $125,000 for police officers to be offensive? How about for Bill Gates? The editor of the local newspaper? A lawyer in your town? The President of the United States? You just cannot take your eyes off of the Cadillac?

A message to my guys. As long as you have a Cadillac (90% pension) parked in your driveway, you are going to be under constant attack. You need to replace the Cadillac with a utilitarian vehicle that costs the same as the Cadillac. And, what might that be? It is a defined contribution plan that costs the same as a defined benefit plan. There is no stated benefit with a defined contribution plan, just a steady annual contribution. As long as the 90% pension is on the stage, you are going to get the tomatoes lobed at you.

Feel free to email me your thoughts. I like rebuttal. Start lobing the tomatoes at me.

"DURANT, OK – Durant Police signed onto many positive changes for the department and the city Wednesday. The Durant Fraternal Order of Police signed a three year contract with the city Wednesday morning.

The contract will give all uniformed officers a 4% pay raise and improve some of the working conditions within the department.

Durant Police say that city manager Jim Dunegan, who is an ex-police officer himself, was integral to the smooth negotiations.

'It gave all the officers a very nice pay raise and it helped with some working conditions we have within the department, and the city made it very easy for us to achieve this,' Capt. Chris Cicio of the Durant Police Department said.

Captain Cicio also says that because negotiations went so smoothly, this is the first time in over 16 years that the city's contract with the Fraternal Order of Police has been signed before the July 1st signing deadline."

About 13 percent of city employees exceeded the six-figure mark in pay last year, when salary, overtime and add-on pay for reasons such as bilingual skills were included. That's up from 4 percent in 2003, and 7 percent since Mayor Jerry Sanders was elected in 2005."

Monday, June 29, 2009

Dunkirk has become the symbol for retreat and many times is portrayed as an act of weakness. This image is completely false. Dunkirk was not a cowardly act by the British. It was a brilliant maneuver that eventually contributed to the ultimate victory. Dunkirk was the best alternative to a certain defeat at the hands of the Germans.

Today, many police unions find themselves in the same position as the British in 1940, having to choose between certain defeat and retreat. The rational choice is obvious. Unfortunately, ego and pride often get in the way. Most police unions need to be in damage control mode until there is an improvement to the economy. The national economy is near the bottom of this contraction and will start growing soon. The recovery for local governments will lag behind by about six months. The Christmas retail season should be better than last year.

The predicament that we are currently in is not a normal recession. Recession is the correction of excess inventory and consumption. The malady that afflicts us now is the product of fear and panic. The last ten months have been a period of forbearance, not the purging of excess. Once confidence improves to a point of security, spending will rebound sharply. It will be the first quarter of 2010 before improvement will be seen in local government revenue.

Today is the most hostile environment to be negotiating in. The next six to nine months will not be much better. Cities will be in the Fred Sanford role - "This is the big one Elizabeth. I'm coming to meet you baby." This makes the seventh contraction that I have had to confront this pessimism. I am sure it is not the last.

If you are currently in negotiations, you have four viable options:

Backload pay increases

Tie raises to an economic benchmark

Provide for wage reopeners if certain conditions are met

Sign a no change or small change contract for one year

Fact finding and arbitration will be difficult to win in most places. The economy is out of your control, just like a hand of cards in poker. You play the hand you get dealt. You currently have a pair of deuces. I would not play like I had four of a kind.

The goal is to hold any damage to a minimum and live to battle another day. Now is the time to build the relationships that will be needed later. You are pinned down and the city has assault rifles and are firing non-stop. Keep your head down and wait for backup (economic recovery). I can hear the sirens in the distance.

If you have a contract that is not up for negotiations and your city wants to renegotiate the current year pay increase, impose furloughs, or other cost reductions, meet with them. It is okay to make concessions, just get their marker. Let go of the bravado. Just focus on the long term goal. The road to success is not straight. Retreat and compromise is not a sign of weakness. Forget about what other departments think.

The economy will rebound quickly and sharply. To benefit from the rebound you will have to still be alive. The biggest problem you will have is with your membership. Lowering expectations is job number one. To your membership, your success depends on how well you improve basic pay. Right now that will be difficult.

It is hard to not be distracted by the "gloom and doom" being disseminated by the press. Ignore them. Concentrate on controlling damages, managing expectations, and building relationships. Play it cool - real cool. Dying for the cause is not a requirement.

City, police reach tentative contract agreement: "TOLEDO, Ohio - The City of Toledo said late Monday afternoon that the Finkbeiner administration and the Toledo Police Patrolman's Association have reached a tentative contract agreement.

Finkbeiner administration spokesperson Megan Robson said the contact package will be presented to the TPPA Wednesday, July 1, for ratification.

The Finkbeiner administration has requested city council to hold a special meeting Thursday, July 2, for council to approve the contract deal."

BeyondChron: San Francisco's Alternative Online Daily News � Retirement Package Drives Cost of Police, Firefighters: "How would you like to make $100,000 a year, get generous annual raises and retire at 55 – with a pension that pays up to 90% of your final salary? San Francisco firefighters and cops get this, while other City workers (who generally make less) only receive up to 75% in retirement pensions. Voters passed a Charter Amendment in 2002 that created this package for police and firefighters – and now it’s costing us dearly. Gavin Newsom’s budget this year gives the Police another $16 million, but $12 million alone goes to pay for increased retirement costs (with 25% of the force eligible to retire.)"

Note from Ron York: Most of you are too young to remember the 1968 Democratic Convention in Chicago, but I am not. Chicago was inundated with a mob of pot smoking, maggot invested hippies who staged a riot under the guise of a demonstration. The Chicago Police Department saved the city from being totally sacked. The national press, which had recently been infected with anti-establishmentism, perpetrated one of the biggest lies since the invention of the printing press. They reported the story as police thugs beating innocent children who were peacefully exercising their right of free speech. They even labeled the event as a "Police Riot." The really bad part was that the public bought the lie. Prior to the Vietnam War, the press had been a fair broker of the news. During 1967 and 1968, they morphed into just another advocacy group. If you do not believe me, call Mark Donahue, president of the Chicago FOP. He will bend your ear off. So will all of his predecessors, like Bill Nolan.

CHICAGO — They arrived at the police union hall looking older, grayer, wider. At least one bore a cane.A reunion of former police officers featured memories and pizza.

It seemed an unlikely reunion: a gathering, 41 years later, of the police officers who clashed with demonstrators during the 1968 Democratic National Convention in this city, leaving behind an image Chicago has tried to shed ever since."

The reunion’s invitation itself, penned by the son of a former officer, offered an utterly different view, saying that the officers had been “the only thing that stood between Marxist street thugs and public order,” and adding: “For decades the collective Left has white-washed what really happened during the riots of 1968 and 1969. Chicago Police officers who participated in the riots continue to endure unending criticism — all of which is unwarranted, inaccurate and wrong.”

Jaime Fitzpatrick, a police officer who patrols Carmel and Sorrento valleys, received a 47 percent increase in pay last year. It was one of the largest raises among the city's work force.The increase wasn't triggered by a promotion or a change in duties..Fitzpatrick received a step increase, education incentive and general salary increase that the police union negotiated. Most of the raise, which boosted her pay to $84,500, was prompted by her completion of two years on patrol and the fact that she had a college degree.

10% cut in Oakland police budget proposed: "(06-28) 19:46 PDT -- On the verge of closing a $83 million budget shortfall, members of Oakland City Council have proposed slashing 10 percent from the Police Department's personnel budget.

The move would cut nearly $12 million from the general fund budget and account for the single largest reduction in the budget proposal that's up for approval on Tuesday.

The question is: Where in the Police Department will the cuts come from?".

Sunday, June 28, 2009

Bob Schussel is a regular contributor to the Vallejo Independent Bulletin (VIB) and friends of the owner and publisher - Marc Garman. The VIB is the organized opposition to the police and fire unions. Bob frequently addresses the Vallejo City Council and is a member of the City Charter Review Committe. Although Bob is a likable guy, he and I disagree on many of the issues involving Vallejo and its bankruptcty case. He hopes to win me over to his point of view and I try to sell mine to him. He is critical of many of my writings. I consider it as fair and just criticism.

When you started writing about Vallejo you said the bar was too low for Bankruptcy and were critical of the analysis that citizens had posted on WWW.IBVALLEJO.COM as overstating shortfalls etc.

It now seems that they were correct and that the Union propaganda that the City had money was incorrect

What may be more important is the price that the Citizens of Vallejo are paying for the Unions unwillingness to help ( next year entry level Police will make $90K and with 2.5 years of service at least $102K), inept City Councils ( gave raises to the VPD even though budget shortfall is at least $10M to $15M) and a FIRE Union that wants to "destroy" Vallejo (no matter what the price) .

Within the next 18 months staffing for Police will fall from a high of 156 to the low 70s, 4 of the 8 Fire Houses will be closed and almost every City Service in the General Fund will be stopped or severely cut--Meals on Wheels ,Community Pool ,Library,most non profit community groups etc.

To date current Public Service Employees have not experienced any cuts--they get FREE health insurance ( up to $14K), retire at age 50 with 90% of pay,get some of the highest wages and total compensation in the US even though we are not a wealthy city.

Your readers will probably dismiss this letter as the rantings of the Public that doesn't really understand and who is anti Union.

The truth is that in Vallejo the Unions have controlled the City Governemt for over 20 years .The Unions have lost sight of the symbiotic relationship that needs to exist. They are killing my City and some of the personal vendettas exhibited by the Unions illustrate how misguided they have become.

If your readers really cared they would tell their brothers in Vallejo to settle with the City (pay give backs and start paying some of the cost of their health insurance) to allow both the Unions and the City to survive our current fiscal crisis.

Robert Schussel

Vallejo CA

PS The Post you choose to put on your site is highly misleading and seems to have taken a page from Kurt Henkes (IAFF 1186 President) rantings.The so called Enterprise Funds by law can not be used for other purposes.

As to every city employee being "pissed off at the City" this is not true. There is a lot of resentment towards the Public Safety Unions putting their own interests ahead of everyone else..

Tommie McLallen, who worked at the Pueblo County Detention Center, had been on paid leave since May 2, when a fellow detention deputy and members of the jail medical staff reportedly were involved in a disturbance at a Pueblo West bar.".

On Thursday afternoon the Sheriff finished the travesty that began in early May.He fired Sgt Tommie McLallen from his job with the Pueblo County Sheriff’s Department.This was an outrageous act of retaliation for Sgt McLallen’s active involvement as your Lodge President carrying forth the will of your organization with regards to obtaining the right to bargain collectively.

Although Sgt McLallen was fired from his position, the FOP Constitution under circumstances such as this allows he remain the Lodge 7 President for the remainder of the term of his elected office.He will be working on your behalf as attentively as he always has.That will not change.Many of you are wondering how Tommie is handling this.He is doing just fine.He knew they were moving to do this to him and both he and his family have been taking the necessary steps to prepare for it.He knows he will be vindicated in the long run, and what they did to him exposed for all to see.

In the meantime there are numerous things in the mill for him with regards to other law enforcement employment and various support efforts being organized both inside and outside of Colorado currently moving forward that will insure both he and his family are taken care of.This issue has grabbed the attention of the National FOP and is being spread to every lodge across the country.

As many of you are aware the investigation of this incident and the manner in which it was prosecuted was shameful at best.Our ongoing investigation reveals it to be a contrived overzealous effort designed to achieve a pre-determined end.In his statement to the local paper the Sheriff was audacious enough to state that “due process” was given and this was the result.Due process is best defined in one word—fairness.Obviously the Sheriff needs to study what due process is before making such a pronouncement.This was not anything remotely close to fairness no matter what the Sheriff and those closest to carrying out his will on this may believe.But that is and has been the way due process has been interpreted under this current administration in the Pueblo County Sheriff’s Office.

You all were advised in my letter of June 26th from the Colorado State Lodge Fraternal Order of Police that this contemptible act of retaliation against you and your Lodge will not go un-challenged.This is headed to a lawsuit involving retaliation, wrongful termination, protected speech, and violations of 1st and 14th amendment rights all resulting in financial loss and emotional pain and distress.Make no mistake about that it will happen.As you all know lawsuits take months if not years to resolve.The FOP and Sgt McLallen are committed to see this through to its final conclusion.You can be assured we will use every venue available to us to fight this arrogant act, and any others that may follow.This is a long term battle both in the legal arena and the political arena.We will prevail in both.This was not a fight we wanted.Apparently the Sheriff and his ever shrinking circle of support did.

After the initial flurry of public and internal communications surrounding this outlandish decision of the Sheriff you can expect things to settle into where they need to be.There will be updates both public and internal via email, the Lodge 7 website, and the State FOP website concerning information that can be released as we move forward.However, most of the work and on this matter will be done without fanfare or release.Rest assured we will be working diligently finishing up the investigation, necessary filings, and preparation for Sgt McLallen’s legal case.We will also be employing other strategies designed to deal with the broader scope of this as time moves forward.So it should be understood by the members that although things will settle down publically, they will be moving forward privately.All that will be done will have your interests, Sgt McLallen’s interests, and your union’s interests and goals at the forefront.

We fully understand the hostile work environment that you work under, and urge you to continue to communicate with us as you have been by email, phone, or through the “Contact Us” page of this web site.All the lines of communication that you have been using to avoid review by the Sheriff and others will remain as the primary FOP communications tool for now.We caution each of you to refrain from using any work computers for electronic communications on this or other issues.We know Sgt McLallen appreciates your support and we appreciate the pertinent information that continues to come into us.What you all have been sending will continue to be kept confidential, and will be treated with your status protected.

You must remember, the city choose the path of BK. While the court ruled they did not have to "pillage" other accounts, the fact is Vallejo has $150,000,000 in a water account. The city choose not to use that money to supplement the GF and pay for public safety. Instead, they choose to file BK to break contracts which previous council agreed to.

They could have found ways to borrow from the existing accounts and pay for the contracts. Instead they leveraged public safety against the existing contracts. Vallejo now has one of the highest crime rates in California. It will take a decade to recover...if at all. Existing contracts were due next year and subject to negotiations.

I think every city employee is embittered by this process. I hope ten years from now the citizens will think it was all worth the effort. However, I think the real people who suffer from this situation, between hard headed union folks and vendictive council members, will be the public.

I don't like the thought of an entire city work force pissed off at the city...but there you have it. Good luck Vallejo!.

Now, a group of four council members has proposed slashing $13.4 million from the Police Department's personnel budget — whether that money comes from ongoing talks on restructuring the police union's contract or not.

The proposal to cut the $13.4 million — made public Friday, four days before council members are expected to take a vote on a two-year spending plan — could put more pressure on the union to accept additional concessions.

It could also have negative impact on public safety — including possible furlough days for police officers or slashing sworn positions in the department — if the council votes to accept the proposal, and the union does not agree to change its contract.".

"The leader of the Toledo Police Patrolman's Association accused Mayor Carty Finkbeiner Friday night of again 'blowing up' an agreement that the two sides had worked out with the concessions needed to help the budget-beleaguered city out of the red.

'As we were finalizing the agreement, Carty called in with two last-minute additions he wanted thrown in,' said Dan Wagner, TPPA president. 'Lawyers from both sides said they were illegal, but the mayor insisted they be put in, and that blew the whole deal.'".

But there's a catch, the association wants six months notice before the city lays off any of its 113 sergeants and officers. The Police Department has lost about 35 positions during the last two years due to layoffs and attrition.".

Union and city leaders announced Thursday evening that Tulsa's police officers and firefighters will take eight unpaid furlough days with the rest of the city's work force. The contracts, reached after weeks of negotiations, still must be ratified by the Fraternal Order of Police Lodge 93 and Tulsa Firefighters Local 176 memberships before they are final."

Calling the graduates "the class that might not have been," Police Chief Ron Palmer commended the officers for staying focused on their training and testing, despite the negotiations.

Friday, June 26, 2009

A second legal challenge of Vallejo's bankruptcy eligibility was thrown out in an unanimous decision by a bankruptcy appeals panel Friday.

The city's controversial plan to emerge from bankruptcy has gained widespread attention, in part, through the proposed erasure of existing city employee contracts. The city's bankruptcy eligibility is considered enough of a "matter of public importance," that the panel has passed the matter to the Ninth Circuit Court of Appeals in San Francisco for review.

The Vallejo City Council unanimously agreed to file for bankruptcy in May 2008 as it faced an overwhelming multi-million general fund deficit with no spending reserve.

A federal bankruptcy court judge ruled that the city was insolvent in September, after initial challenge from city unions.

Today, the United States Bankruptcy Appellate Panel of Ninth Circuit slapped down the IAFF and IBEW and agreed with Bankruptcy Judge Michael McManus.

Guys, the firefighters in Vallejo are going to fly this plane right into the ground - just as I predicted. Every loss they incur brings us one step closer to having a "drive through window" for municipal bankruptcy. They have already done irreparable damage to public safety contracts. The damage will continue until this self-centered suicide mission is shut down. This is not the IAFF against the world. The IAFF is a great organization. I was once the president of my IAFF local. I love the fire service. This is a small group of angry, vindictive people who would endure death to inflict pain on their "enemies."

The circus will continue as long as Harold and people like you keep sending money. Many of you in California see the Vallejo union as the standard bearer for your cause. They are not. Cities all over California and the United States are watching the Vallejo disaster and waiting for the green light to follow the same path. Are you listening - Oakland, Contra Costa, Gary, Duluth?

City management and three unions - the Chandler Service Employees International Union, the Chandler Law Enforcement Association and the local International Association of Firefighters - have been at loggerheads over two of management's demands. Had the two sides not reached an agreement via federal mediation by Thursday, the City Council would have imposed a solution."

More funds, fewer cops - Local - The Modesto Bee: "Modesto had shielded its Police Department from significant spending cuts since 2002 until the budget year that begins next week, though that investment hasn't resulted in more cops on the streets.The city's $51.5 million law enforcement budget for 2009-10 is about $4.4 million greater than in 2004-05, when Modesto had 261 officers in uniform. This year, it'll have 253 if the city can salvage a deal with its primary police union to prevent layoffs in its ranks.At least nine officers will lose their jobs Tuesday unless the two sides can get back to the bargaining table."

The legislature voted 18-0 to table the resolution despite a last-minute memo from County Executive Steve Levy saying that without the bill it would be 'nearly impossible' to negotiate a deal because the police union has been 'totally uncooperative' in ongoing talks."

Note from Ron York - Everyone of you need to read this article. It is about a Tulsa city councilor, Bill Martinson, that has put a large amount of time and energy into trying to make large reductions in the Tulsa police and fire departments. There is a link that goes to his lengthy and well organized report. Bill is a decent and intelligent person. I am sure he truly believes everything he says. However, the topic of public safety compensation is much more difficult to understand and compare than most people realize. Bill's report makes, or at least implies, the assumption that wages (all wages) go up at the same rate as the CPI. They do not. Wages grow at a faster rate than CPI. This is because of increases in general productivity - real growth of GDP per capita. I am glad we do not have an opponent like Bill in every city. However, no matter how honest and sincere his intentions are, they do not make a true comparison for public safety compensation in Tulsa. Since 1945, GDP Per Capita (after adjusting for inflation) has quadrupled. Read Bill's report and think about what you would do if someone on your council should do something similar. Do not try to explain it away by painting Bill as a demon or lunatic. He is neither.

The Fraternal Order of Police Lodge 93 and the Tulsa Firefighters Local 176 'have done a masterful job of dictating policy,' the councilor said.

'This needs to stop and elected officials must assume responsibility for the citizens.'

Martinson's statement came a week after his controversial proposal to reduce the Police and Fire departments' combined budgets by $15.7 million from $142.7 million this fiscal year to $127 million for the one that begins July 1."

Accusations fly at contentious Escondido council meeting: "Budget disagreements among Escondido City Council members Wednesday night deteriorated into accusations of backroom deals by a council majority with the powerful police officers union to derail a proposed budget that contained employee compensation cuts.

In a dramatic confrontation, Mayor Lori Holt Pfeiler accused council members Olga Diaz, who is married to an Escondido police lieutenant, Marie Waldron and Sam Abed of conspiring with the Escondido Police Officers Association.

Pfeiler alleged that the three made a deal with the union to vote against cuts in police compensation, which was part of a three-pronged approach that Pfeiler wanted to use to balance the budget for the fiscal year that begins next week."

Wednesday, June 24, 2009

A campaign to publicize the identities of thousands of people receiving hefty government pensions -- from onetime professors to former fire chiefs -- is catching on around the country.

The effort was launched earlier this year by a California interest group determined to promote its view that steep pension payments are bankrupting states and localities. Newspapers in New York, Rhode Island, Massachusetts, Illinois and elsewhere have published lists of their six-figure public retirees.

Donald Gerth retired from California State University at Sacramento, and has an annual payout of $278,055.

Those named are former public employees and their dependents who receive an annual pension of more than $100,000. Atop one list is a former city administrator from the small Southern California town of Vernon, whose annual pension is $499,674.84.

The police and fire departments were asked to cut their budgets by requiring officers and firefighters to take six unpaid days off or face job cuts.

Those departments must now decide how to make those mandated cuts, although union representatives said they could not be accomplished through furloughs.

'The city manager made it very clear that 'Even if you give up these six days of unpaid leave, we won't guarantee we're not going to lay off,'' said Kathy Harrell, police union president. 'So there's no guarantee there wont be a layoff if they get these days off.'"

Modesto votes to lay off 9 officers - Featured Stories - The Modesto Bee: "Urgent pleas from Modesto police officers Tuesday couldn't persuade the City Council to halt budget cuts that would lay off nine cops in the next week.Both sides reiterated their bargaining points in a short but tense council meeting that drew more than 150 people.Council members maintained that they wouldn't lay off officers if the Modesto Police Officers Association agrees to defer raises for one year, saving the city $820,000."

Note From Ron York - Guys, this type of attack is not going away. It will have to be acknowledged and dealt with. People who do not understand the concept of deferred compensation, less pay when you are an active employee in order to get pay after you quit working, see public safety pensions as outrageous. You can scream back at the attackers, but it will only cause their drum beat to get louder. Ignore this long enough and the PERS programs will be destroyed. Oh, it may not effect you, but it will those who come after you. The reasons for public safety pensions have not changed. These pensions serve society's needs by maintaining both an experienced and young work force. Just as you have an obligation to serve and protect the public, you have equal responsibility to your profession. No one else is going to do it. Those who only look at society through a prism of frugality and misguided "fiscal responsibility" will not relent until substantial damage is done to your vocation. If you love law enforcement and the fire service, you have a duty to protect your vocation. The barbarians are at the gate today. Are you ready to push them back or are you only going to stand there and shout obscenities at them? Listen to your heart. It has the right answer.

.

BY KURT BROUWER

SEEKING ALPHA

Budget Busting Pensions Must Be Reined In -- Seeking Alpha: "On a daily basis, we are seeing alarming news about the pension crisis in towns and cities across the state of California and the nation. What the heck is going on? In a nutshell, while you were out living your life, your local and state politicians were making pension promises that extend many years into the future. And, in many cases, the required funding simply is not in place. To make things worse, these promises were made to our firefighters, police and other employees of the government. These are the people who make everything in a given town work."

.

Tuesday, June 23, 2009

Police layoff decision tonight - Local - The Modesto Bee: "The road to tonight's Modesto City Council decision on whether to lay off 10 cops started a year ago with a series of 11 bargaining sessions that resulted in a new police contract praised by both sides.That deal, crafted by new union leadership and veteran city officials, promised to raise officer pay by 10 percent despite an apparently worsening recession.It's now the crux of a visceral dispute between the Modesto Police Officers Association and city officials who can't agree on a way to adjust the contract and prevent layoffs."

.

Sunday, June 21, 2009

"It was a tale of two unions in Friday's Mercury News.In one story, there was San Jose's Municipal Employees Federation, the largest city union, which reopened its contract and gave back raises to help save jobs and city services. On the same page, there was the firefighters union, by whom, in the sublimely quotable words of the Santa Clara County civil grand jury, the city has been 'hosed.'"

I took offense to the statement in your editorial last Sunday regarding residency that read, in part, “watch [the cities’] employees, especially those at the top scale, become commuters with no more loyalty to the community than a paycheck buys.”"

Why would anyone not like a ten dollar bill? Well, a ten dollar bill is an unusual bill. If I owed you $100, I could pay you with one one-hundred dollar bill, or two fifty-dollar bills, or five twenty-dollar bills, or ten ten-dollar bills, or twenty five-dollars bills, one-hundred one-dollars bills, or a combination of any and all of these. Does it really matter?

Based on the response I have received, the most objectionable thing about those "California Pensions" is the 30 years service and 90% benefit. I hear you and I aim to please. Below is a recap of the numbers I gave to you yesterday. They represent the annual earnings for an average police officer in a large California police department.

$85,000 Paycheck

$13,000 Insurance

$27,000 Deferred Compensation, e.g. pension

$125.000 Total Pay

It is that $27,000 in deferred compensation that you despise. No problem. I will make it disappear right before your very eyes. Poof, it's gone.

$112,000 Paycheck

$13,000 Insurance

$125,000 Total Pay

I will even go further and get rid of that other parasites - insurance. Abracadabra, hocuspocus. It's gone.

$125,000 Paycheck

$125,000 Total Pay

That was easy enough. No more unfair pensions. What? You are still not happy? I got rid of the legacy cost - the things you hate so much. Instead of waiting to pay thirty years from now, you pay right up front, every other week. Now, this is "fiscal responsibility." I can see by the look on your face, you are not happy. Have I misinterpreted your intentions? I see. It is the $125,000 total compensation that you want rectified? So, we can forget about the pension? No? You still do not like? So, What's Wrong With A Ten Dollar Bill? It's just a matter of bad taste? Okay, I hear you. As your obedient servant, I have only one goal - make you happy and I intend to do exactly that. How does this look?

$50,000 Paycheck

$2,500 401K

$3,000 Insurance

$55,500 Total Pay

Now we're cooking. We got them down there where they belong. A little humble pie will be good for selfish public safety ingrates. Hey, Ron's here to make you happy. Oh, before I go there is one little thing. It is not really important. I shouldn't even bother you with it. Now, I have gone piqued your curiosity. Okay, okay. When we arbitrarily sliced the public safety paychecks we had to make a Faustian deal with the devil - caps on all other jobs. I would not waste anytime over these minor revisions. You want to go over the list? Nah, you don't want to waste your time. It's Friday. Okay, if you insist.

$35,000 Newspaper reporter

$65,000 City administrator

$100,000 Gynecologist

$60,000 Engineer

$35,000 School teacher

$75,000 Major league sports player

$25,000 office workers

$150,000 CEO of Fortune 500 company

$55,000 All around plant manager

Minimum wage $2.00 per hour

Just one more question. So, What's Wrong With A Ten Dollar Bill?

Everything I have said up to this point is foolishness. There is nothing wrong with a ten dollar bill. You want and need a product. To get that product in a sufficient quantity you will have to the pay the market price. Laugh if you want, but there is a market place for everything and ergo a market price. How you pay for the product does not matter. So, What's Wrong With A Ten Dollar Bill? After all, the pension is only a portion of the cost, not "the entire cost."

Police compensation in this country is determined by the market place. Go out and study and come back with the following homework completed.

1) What is demand?

2) What is supply?

3 What is the equilibrium price?

4) What is elasticity of supply and demand?

5) What is the exclusionary principle?

The correct answers come from Adam Smith and Milton Friedman, not Keith Olbermann.

They don't come from the "Three Stooges" of economics - Marx, Stalin, and Mao. Those geniuses would heartily endorse your scheme to replace the market place with your subjective judgement.

So, What's Wrong With A Ten Dollar Bill?

Think about it. Let me know what you find out.

So, What's Wrong With A Ten Dollar Bill?

(revised and edited 7:00 AM CDT 6-20-09)

.

Friday, June 19, 2009

"OAKLAND — In March 2008, after a nearly two-year effort between the Oakland Police Department and the police union to reach an agreement on a new labor deal, an arbitrator granted police brass broader management rights in exchange for 4 percent annual pay increases for officers.

Both sides said they were satisfied with the outcome.

Jump ahead 15 months and, with Oakland in the worst financial crisis anyone can remember, that same contract is the source of consternation between the City Council and the Oakland Police Officers Association as the two sides struggle to reach a deal that is agreeable to the union while helping Oakland through its financial straits."

Thursday, June 18, 2009

This is the first of many articles about police and fire pensions. I will write small articles, that address the question raised in the title, until the issue is talked out or I grow weary. I am going write on impulse. I may write three articles in one day and then go silent for a month. However, I will tell you when I am finished.

Right up front I want to make two stipulations:

1) Most California departments offer a 90% pension for 30 years of service.

2) Many California departments make most of the contribution to the pension.

We can dispatch these two points before we even start. We will pause for a minute to allow all the small government advocates in Orange County to give each other high fives. It will be the last time for such celebration.

Where do we begin? Well, I think we will start with the paycheck and see where that leads us. Here is what we currently know. The average police officer in larger California police departments gets an annual paycheck of $85,000 before income taxes. In addition, the average employer is contributing about $13,000 toward group insurance. This means that our average officer is getting a current economic package of $98,000. This does not include any overtime. Overtime is not predictable and it also requires you to forfeit one hour of your life for every hour you work. It is not a bonus freebie. The same employer is also contributing $27,000 each year toward deferred compensation - retirement, medicare, retiree insurance, etc. Our average police officer has a total annual package worth $125,000. Deferred compensation is 21.5% of that compensation. Okay, which of the operative numbers do you see as obscene:

1) 90%

2) 21.5%

3)$125,000

4) 30 Years

5) All of the above

Do not answer now. Think about it a while. For now let's get back to the paycheck in general. How do you feel about the "legacy cost" - $40,000 per year? I do not know who came up with that name, but they wasted a rather beautiful word. Legacy now has a strong negative connotation. Why didn't they call it the "Nazi" cost or maybe the "devil" cost?

Currently, there are many advocacy groups clamouring for police and fire pensions to be severely diminished or completely eliminated. These groups see pension cost as a welfare program for cops and firefighters that has been unjustly taken by politically astute employee unions that have been whipped into a frenzy by a group of union thugs.

These advocacy groups see the world as a "Tale of Two Cities" - the "sucker city" and the "enlightened city." The sucker city just meekly goes to the slaughter and coughs up the $40,000. The enlightened city says "Hell No!" and refuses to pay the extortion money. The two cities are side-by-side, but there is no problem as the result of these differing attitudes and pay packages. Fortunately for the enlightened city, employees and potential employees are too stupid to notice the $40,000 difference. The sucker city is just throwing its money away. Meanwhile, the enlightened city, where I reside, has beaten the union thugs into submission and everything is wonderful. We have saved a bundle. I am going to make this the paradigm for my life. The next time I go the gas station, I going to say "Hell No!" to that ridiculous $3.00 per gallon and only pay $2.00. The rest of you can pay the $3.00, you wimpy suckers.

I am going to let you finish this story. Just take it where you would like go. Just don't get taken. Market price? Ha, I am not paying.

I have some homework for you. Do a little research and the next time we get together tell me what an "unfunded, or under funded liability" is. Don't just Google it and recite it back to me like a parrot. Put some thought into it.

I look forward to visiting with you again. It may be later this evening, or the the 4th of July, or the middle of the night next week. I am going to use the Quaker method.

The national average for police officers per 1,000 citizens is currently 2.40 officers per 1,000 citizens. The Modesto city council voted to establish the minimum number of police officers at 1.85 officers per 1,000 citizens. Although this commitment was made, our staffing numbers have significantly declined causing our city to have only 1.22 officers per 1,000 citizens.Due to budget cuts already imposed by the city, these declines have caused our association to currently have 28 vacant police officer positions as of May 2009.

Our staffing levels for police officers were higher in 1998!There were 27,000 less residents in Modesto in 1998. The Police Department currently has only 202 sworn police officer and detective positions.